This article by Jared Dillian is worth a read in regard to leveraged ETF's and the "beta slippage" that is created by the daily re-balancing of the ETF:
In my case, I tried BBOZ for a brief time and was reasonably impressed at the speed with which I could lose money on it. Any suggestions on ways to short these leveraged ETF's would be good.
Definitely worth a read. Agh ! The cause of the next GFC when they try to unwind them???
Definitely worth a read. Agh ! The cause of the next GFC when they try to unwind them???
Interesting reading ....a good comment post on the article
1. The trick with leveraged funds is to invest during periods of true low volatility, i.e., when you expect the market to either consistently go up. Or down, if investing in inverse funds.
2. "Look, the whole point of Wall Street is to have a transfer of wealth from the unsophisticated to the sophisticated." That is extremely un-American and, if true, we might as well turn to communism. Democracy and capitalism has no future in a land of thieves and idiots. Think about that the next time you consider investing on the advice of idiot stock brokers like this author.
"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
I haven't taken a BBUS position yet ... but certainly, keeping it on the watch list .... easy credit ultralow interest rates has been the driver of the markets ...how much larger can we tap DEBT to growth is the million dollar question... if we keep dropping rates I guess we can continue the madness ..get to a point where you make money on having debt and lose if your saving is that the future plan? or will we have a huge correction and wipe a ton of debt and see interest rates back and sane levels
Last edited by JBmurc; 15-11-2017 at 08:57 AM.
"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
I haven't taken a BBUS position yet ... but certainly, keeping it on the watch list .... easy credit ultralow interest rates has been the driver of the markets ...how much larger can we tap DEBT to growth is the million dollar question... if we keep dropping rates I guess we can continue the madness ..get to a point where you make money on having debt and lose if your saving is that the future plan? or will we have a huge correction and wipe a ton of debt and see interest rates back and sane levels
Well for sure we will get signs from the bond market ...when we see a major spike higher it's going hurt emerging markets and hurt growth in debt which as we know is the fuel driving the likes of the S&P to record highs ... so many companies loan to buy back shares to add give EPS growth and hit mgmt bousnes >> property markets at record high.. consumer debt - cusumer spending all connected ....house of cards that heading for a HUGE correction
"With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu
"The yield curve has flattened, with the spread between 10-year and 3-month Treasuries falling to 1.0% on the above graph. That is what one would expect when the Fed hikes interest rates in a low inflation environment: short-term rates will rise faster than long-term rates. But a negative yield curve, where short-term rates are higher than long-term rates, is a reliable predictor of recessions in the US economy. Each time the yield differential on the above graph crossed below zero in the last 50 years, a recession has followed within 12 months.The bull market continues but investors need to keep a weather eye on interest rates and the yield curve." http://tradingdiary.incrediblecharts...ding_diary.php
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